Transferring revenue to LTD company

[grgzy]

Hello,

The situation
I have a limited company which I use for some of my business operations.
Whilst I also run other projects as sole-trader where the funds come in and out of a sole-trader bank account & paypal.
One of these sole-trader projects is growing bigger and I wish to start running it through the limited company.

The questions
Let's say I have £5000 saved up and also bought stock worth £5000 and paid for it and all relevant taxes through the sole trader account and have the full £5k worth of stock and £5k in cash remaining.

1. How would I transfer this over to the limited company?
2. Would the company effectively owe me £10,000?

Other information
The limited company is used to sell advertising space on a website I run so only has incoming transactions around 1 per month. The sole-trader now has its own premises and is growing fast so would be beneficial to start running it as a limited company.

 

[Scalloway]

1. I would get the sole trader business to sell the stock to the ltd company. As long as the paperwork is done the ltd doesn't need to pay for it right away. Just py the money into the limited company's bank.

2. Yes

 

[grgzy]

Thanks Scalloway!

 

[k100danny]

Is there any reason you want to start running part of the business through another company? if the sole trader business is getting bigger it may be worth making that business a company. It isn't to avoid hitting the VAT threshold is it?

 

[Bob]

Is there any goodwill to sell?

 

[grgzy]

k100danny: The reason for merging instead of creating a separate entity is to theoretically have half the accounting and organisational costs and time required managing them. Also the sole-trader business is expected to soon over-shadow the current LTD in terms of revenue.

VAT limits are not a deciding factor.

Bob: Only the current LTD would posses any worthwhile goodwill.

Also as the only Director of both companies I am not in need of immediate reimbursement for any assets transferred to the LTD company.

The other option I feel may be applicable is to sell the sole trader assets through the sole-trader (Through its own payments set-up) and then provide the LTD Company a directors loan to buy new stock from suppliers.